Blinken, unaware of Germany’s tax penalties on US military personnel, says he will get involved
Stars and Stripes September 9, 2021
STUTTGART, Germany — Secretary of State Antony Blinken said this week that he is unaware of a treaty dispute that has exposed scores of U.S. military personnel to hefty tax penalties at the hands of German finance authorities, but that he intends to look into the matter.
“I’m sorry, not something that I’m aware of, but I’d certainly invite you to take that up with the embassy, if they can work the issue and I’ll double back and look into it,” Blinken told Stars and Stripes following a visit to Ramstein Air Base late Wednesday. “Not something that was on my radar.”
Blinken, who was in Germany to discuss with allies evacuation efforts in Afghanistan, oversees a State Department in charge of resolving the disagreement over how the NATO Status of Forces Agreement should be interpreted.
The U.S. contends that attempts by German authorities to tax certain troops, Defense Department civilians and contractors amounts to a violation of a treaty designed to make military pay off limits to local tax collectors.
As a result of the situation, hundreds of DOD personnel have been issued tax penalties by German authorities that in some cases have reached into the six figures. That is on top of the American income tax they are required to pay.
In June, Defense Secretary Lloyd Austin personally raised his concerns over the issue with his German counterpart, Annegret Kramp-Karrenbauer, during a meeting at the Pentagon.
Other German officials, including Foreign Minister Heiko Maas, also have expressed interest in resolving the matter, which is at a standstill one year after the U.S. Embassy in Berlin lodged a formal complaint over the issue.
It’s not clear why Blinken has been in the dark about the dispute. But more direct involvement from the top American diplomat could help nudge talks forward.
At issue is a contention by some German finance offices that Defense Department personnel can be taxed if they have motivations for being in Germany beyond just their jobs.
In Germany, unlike the case in any other allied country where U.S. forces are based around the world, troops and civilian personnel are exposed to liabilities if local tax offices decide that a military member is not in the country “solely” for work.
Being married to a German, sending a child to a German school, extending tours or owning property are among the factors that German authorities have considered when deciding to impose penalties.
By contrast, DOD personnel in other countries routinely marry locals or have extended tours without threat of local income taxation. These include Italy, Spain, the United Kingdom, Japan and South Korea.
Last year, there were nearly 400 cases involving SOFA status personnel in the greater Kaiserslautern area alone. They included an Air Force master sergeant who was targeted for extending a tour and being married to a German woman.
Teachers at military schools, many of whom remain in their positions for years on end, also could be at heightened risk.
Stars and Stripes reporter Jennifer H. Svan contributed to this story.